All the healthcare you can afford

strategy+business, July 31, 2019

by Theodore Kinni


Illustration by adventtr

In 2014, a syllabus and sample lecture for a course entitled Introductory Korean Drama (pdf) surfaced at Princeton University. Written by the eminent healthcare economist Uwe Reinhardt, it began, “After the near‐collapse of the world’s financial system has shown that we economists really do not know how the world works, I am much too embarrassed to teach economics anymore, which I have done for many years. I will teach Modern Korean Drama instead.” It appears that some economics professors aren’t nearly as dismal as their science.

Reinhardt never taught the class, which he said began as an impromptu lecture at a dinner with a group of Korean and Taiwanese health insurance professionals. But his tongue-in-cheek analysis of Korean TV dramas offers a glimpse of his ability to get to the nub of a matter. So does Priced Out, Reinhardt’s final book, published earlier this year, two years after his death in 2017.

In the book, Reinhardt gets to the crux of the ongoing debate over the American healthcare system — in which solutions abound but relief is nowhere in sight — with just one question: “As a matter of national policy, and to the extent that a nation’s health system can make it possible, should the child of a poor American family have the same chance of avoiding preventable illness or of being cured from a given illness as does the child of a rich American family?”

This is the ethical issue hidden behind all the talk of free markets and government control, the political rhetoric about socialism and states’ rights, and the calculations of how much the people of the United States can or can’t afford to pay for healthcare. Clearly, it’s an uncomfortable one. When Reinhardt first posed the question more than 20 years ago, he was dismissed as a “socialist propagandist” for his temerity.

“And so,” he laments, “permanently reluctant ever to debate openly the distributive social ethic that should guide our healthcare system, with many Americans thoroughly confused on the issue, we shall muddle through health reform, as we always have in the past, and as we always shall for decades to come.” 

But muddle through we must, because of two long-term trends: the seemingly inexorable growth in healthcare spending and the increasing inequality in the distribution of income and wealth. These trends, Reinhardt argues, “already are pricing more and more American families in the lower part of the nation’s income distribution out of health insurance and healthcare as families in the upper half of the distribution know it.” In other words: No, currently, the child of a poor American family does not have the same healthcare prospects as the child of a rich American family. Read the rest here.

Getting full value from external talent

strategy+business, July 25, 2019

by Theodore Kinni



Photograph by Hero Images

Many recent studies of talent include some version of the prescriptive advice in PwC’s Preparing for tomorrow’s workforce, today report: “Harness the potential of flexible talent and innovation.” The wellspring of flexible talent and innovation is the contingent or alternative workforce — these days, that includes the fast-growing ranks of freelancers, independent contractors, gig workers, and the crowds whose collective genius companies can tap to address a variety of challenges.

The problem, as the PwC study found, is that 92 percent of companies are not managing these contingent workers as effectively as they could. Even as companies rely on contingent workers in ever-greater numbers, they often make it difficult — if not impossible — for them to contribute in full measure. Leaders need to do better.

This didn’t matter much 30-something years ago when I became a full-time freelancer. Most industries had little use for contingent workers then, and most workers wanted “real” jobs on the payroll. By 2017, however, 57 million American workers identified themselves as freelancers — that’s 36 percent of the workforce and nearly 50 percent of millennials. And contingent workers are in demand in a host of industries for a host of reasons. These include (but are not limited to): the record low unemployment rate, shortages of talent in emerging capabilities arenas (like AI and robotics), and the growing numbers of business models and workforce strategies that depend on contingent workers.

Yesteryear, managing contingent workers was something of a contradiction in terms. It seemed like a major reason to hire independent contractors was that you didn’t have to bother managing them. If there was a problem, the relationship could easily be terminated with a minimum of cost or conflict. And regardless of how well contingent workers performed, it was the rare manager who thought it might be worth cultivating an ongoing relationship. The operative managerial mind-set was “here today, gone tomorrow.”

That mind-set has been transformed over the last decade, as contingent workers have become more central to more companies’ operations. Read the rest here.

A new view of the fortune at the bottom of the digital pyramid

strategy+business, July 24, 2019

by Theodore Kinni




Photograph by code6d

The benefits of digitization and Internet connections in developing nations — and the opportunities awaiting companies that can provide them — have been much lauded in the past couple of decades. But as Payal Arora, a professor at Erasmus University Rotterdam, clearly demonstrates in her new book, The Next Billion Users, the conventional storyline around the transformative effect of technology on people’s lives often doesn’t ring true.

Arora, who has been studying how the global poor outside the West use computers and the Internet for nearly 20 years, discovered this for herself during her first development project in a rural region of southern India. “The goal,” she explains, “was to infuse this town with new digital technologies to help the poorer members of the community leapfrog their way out of poverty.”

The project team set up computer kiosks and funded cybercafes. It sent computer-equipped vans to remote villages to promote Internet awareness. “We envisioned women seeking health information, farmers checking crop prices, and children teaching themselves English,” Arora writes. The reality was the polar opposite: The kiosks became Pac-Man gaming stations, social networking sites dominated computer usage in the cybercafes, and the free movies used to attract people to the vans became their primary draw.

“Many of the technology development projects I have worked with since have yielded similar results,” Arora writes. “Play dominates work, and leisure overtakes labor, defying the productivity goals set by development organizations.” (Imagine the sniffing among Western do-gooders.)

This is the source of what Arora defines as the third digital divide between the developed and developing worlds. The first digital divide is access to technology. The second divide is the ability to use the technology — to read and write, for instance. And the third divide, which Arora labels “the leisure divide,” is rooted in motivation. “The leisure divide is about understanding what the global poor want from their digital life and why it matters to them,” she writes. “It reminds us that fulfillment is not necessarily a matter of efficiency or economic benefit but can involve a more elusive, personal, and emotive drive.” Read the rest here.

Casting the Dark Web in a New Light

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, July 15, 2019

by Keman Huang, Michael Siegel, Keri Pearlson, and Stuart Madnick

With cyberattacks increasingly threatening businesses, executives need new tools, techniques, and approaches to protect their organizations. Unfortunately, criminal innovation often outpaces their defensive efforts. In April 2019, the AV-Test Institute, a research organization that focuses on IT security, registered more than 350,000 new malware samples per day, and according to Symantec’s 2019 Internet Security Threat Report, cyberattacks targeting supply chain vulnerabilities increased by 78% in 2018.

Wide-scale attacks are becoming more common, too. In October 2016, a distributed denial-of-service (DDoS) attack that hit Dyn, a domain name system (DNS) provider, in turn brought down companies such as PayPal, Twitter, Reddit, Amazon, Netflix, and Spotify. In 2017, the WannaCry and NotPetya ransomware attacks affected health care, education, manufacturing, and other sectors around the world. A report from the Department of Health in the U.K. revealed that WannaCry cost it 92 million pounds. That same year, while the cyber-defense community was working out how to fight ransomware, cryptojacking — the hijacking of other people’s machines to mine cryptocurrency — arose as a threat. Cryptojacking attacks detected by Symantec increased by 8,500% during 2017. During 2018, the value of cryptocurrencies plunged 90%, yet Symantec still blocked four times as many cryptojacking attacks as the previous year.

Attackers always seem to be one or two steps ahead of the defenders. Are they more technically adept, or do they have a magical recipe for innovation that enables them to move more quickly? If, as is commonly believed, hackers operated mainly as isolated individuals, they would need to be incredibly skilled and fast to create hacks at the frequency we’ve seen. However, when we conducted research in dark web markets, surveyed the literature on cyberattacks, and interviewed cybersecurity professionals, we found that the prevalence of the “fringe hacker” is a misconception.

Through this work, we found a useful lens for examining how cybercriminals innovate and operate. The value chain model developed by Harvard Business School’s Michael E. Porter offers a process-based view of business. When applied to cybercrime, it reveals that the dark web — that part of the internet that has been intentionally hidden, is inaccessible through standard web browsers, and facilitates criminal activities — serves as what Porter called a value system. That system includes a comprehensive cyberattack supply chain, which enables hackers and other providers to develop and sell the products and services needed to mount attacks at scale. Understanding how it works provides new, more effective avenues for combating attacks to companies, security service providers, and the defense community at large. Read the rest here.

Peter Drucker’s favorite leadership writer

strategy+business, July 12, 2019

by Theodore Kinni



Photograph by FXQuadro

Peter Drucker, the Austrian-American business author and consultant who defined management in the second half of the 20th century, wrote 39 books. Oddly, the word leadership doesn’t appear in any of their titles. In 1954, in his landmark The Practice of Management, Drucker suggested why: “The first systematic book on leadership: the Kyropaidaia of Xenophon — himself no mean leader of men — is still the best book on the subject.”

Kyropaidaia, or Cyropaedia, is the biography of Cyrus the Great, who used military conquest and enlightened governance to create the first Persian Empire around 540 BC. Xenophon the Athenian wrote the bio nearly 200 years later, and it became part of the leadership syllabus for centuries: In his 2001 book, Xenophon’s Prince: Republic and Empire in the Cyropaedia, Christopher Nadon, a professor at Claremont McKenna College (part of a consortium that includes the Drucker School of Management), writes that Alexander the Great and Julius Caesar read Kyropaedia and it was a strong influence on Machiavelli’s The Prince. Thomas Jefferson had two copies in his library.

So what do we know about Xenophon? Drucker’s description of him as “no mean leader” might be based on Xenophon’s own memoir. Titled Anabasis, it’s the story of a misbegotten military expedition, the emergence of a reluctant but talented leader, and a strategic, fighting retreat that saved an army of 10,000 mercenaries stranded deep in enemy territory.

Before he became a writer, Xenophon was embedded in this army, known as “the Ten Thousand.” Around 400 BC, Cyrus the Younger, a distant royal relation of Cyrus the Great, recruited the force as part of a military expedition. Cyrus was generous with favors and promises, but he didn’t bother to mention that his true purpose was to depose his brother, Artaxerxes II, who had inherited Persia’s throne.

Cyrus was killed in the first battle against Artaxerxes. The war lost, a group of generals and captains from the Ten Thousand tried to negotiate safe passage home — and they were betrayed by allies and slain. Thus, the Greek mercenaries found themselves leaderless and without provisions. “Separated from Hellas by more than a thousand miles, they had not even a guide to point the way,” reported Xenophon, who wrote Anabasis in the third person. “Impassable rivers lay athwart their homeward route, and hemmed them in. Betrayed even by the Asiatics, at whose side they had marched with Cyrus to the attack, they were left in isolation.” Read the rest here.

Cloud-based HCM systems should come without surprises

Lent an editorial hand preparing this guide to preparing a reality-based business case for HCM:

Deloitte's Capital H Blog, July 3, 2019

by Marty Marchetti

The business case for cloud-based human capital management (HCM) systems can sound pretty compelling. What CHRO wouldn’t want fast access to the latest advances in HCM technology at a lower overall cost? But my colleagues and I help companies make the move to cloud HCM, and we often get a firsthand view of the mismatch between expectations and reality that was revealed in Deloitte’s 2019 Global Human Capital Trends study.

It is important to have a comprehensive and accurate total cost of ownership for cloud HR before your company commits to it, during the implementation, and after it is in place.

“No surprises” should describe your move to the cloud, and the following 5 questions can help you reduce them. Read the rest here.